For many people, an annual Christmas road-trip that passes through the bleached one-silo towns of the Victorian wheat belt will be the closest they’ll come to one of the biggest social and economic conundrums facing Australia.

When the hard times hit the wheat industry, ageing grain hoppers, shuttered shops and shrinking towns become a mere blink on a B-double truck driver’s interstate route.

But lo! There’s a gleaming mountain of money on the horizon. More precisely a $3.4 billion offer from US food processing and commodity trader
Archer Daniels Midland
.

Of course, where foreign investment and agriculture are concerned, there’s nothing as simple as a foreign white knight with a bulging wallet.

As the Australian economy becomes enmeshed with the rest of the world, our conversation becomes an economic and emotional one about who owns our industries, who controls the money from farm gate to supermarket and how much consumers are willing to pay.

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It’s not just about grains, but also cheese, cars, submarines, supermarkets and even telecommunications equipment.

Promiscuous global consumers

But are politicians and industry lobbyists on the same page as the rest of Australia? With the exception of fashionable causes like Australian fresh food and local produce, the average household is likely have a Korean car in the driveway, a Chinese-made iPhone and a dried up heel of Parmigiano-Reggiano in the fridge. You’d be hard pressed to find anyone these days to identify themselves as a “Ford man" or an “Holden man".

Australians are promiscuous global consumers with a tenuous emotional attachment to the “Australia Made" logo.

Treasurer
Joe Hockey
finds himself in a an unenviable position.

By law, he is the final authority on any major foreign investment. By inclination, he is an economic rationalist who would regard industry subsidies and government intervention as anathema to a modern, outward-looking economy.

Trouble is, the Foreign Investment Review Board and the Australian Consumer and Competition Commission only operate within an economic framework.

The catch-all phrase – in the national interest – means Hockey is compelled to consider the non-economic issues as well.

Ostensibly, these are things such as national security, food security, even local issues such as public infrastructure.

For example, if a large company takes over such an Australian near-monopoly as
GrainCorp
and decides it will no longer use dilapidated branch railway lines to remote agricultural areas, how will local growers get their products to market?

Will the product travel by road on B-double behemoths? How much will that cost the local producer? What impact will the extra traffic have on local roads? How will it affect local communities?

Will the local farmer find it all too difficult and pack up his family to move to the city?

National security vs economics

Soon the Abbott government will have to decide whether to spend $40 billion to replace the troubled Collins-class submarine with an Australian-made vessel or a foreign-made, off-the-shelf model for a quarter of the cost.

Will national security still trump the economic argument?

Similarly, in 1948, the Labor government supported the creation of an Australian car industry as a strategic prop in the nation’s post-war reconstruction. Can the existence of a heavy manufacturing industry still be considered a key factor in Australia’s defence against a foreign enemy?

The list of economic rationalism versus nationalism goes on. If you believe national defence is a quaint outdated notion, the Abbott government’s decision to ban Chinese telco
Huawei
from the national broadband network is proof it lives on.

Hockey has asserted he will not be bullied by anybody on his decision to approve or reject the ADM bid. But it is naive to believe Hockey, as an elected representative, would not consider the views of the Coalition’s local constituents.

The fevered speculation continues about who said what to Hockey, to Abbott, and what circuitous means could be used to block or allow the bid.

On Friday the latest report was that the Nationals and rural Liberals have such sway, Prime Minister
Tony Abbott
could overrule his Treasurer to veto the ADM bid using outlandish conditions attached to the sale. GrainCorp shares fell on the story.

It’s not only local wheat farmers waiting on Hockey’s decision.

Markets on tenterhooks

GrainCrop, ADM and farming group representatives have all been in Canberra this week to lobby politicians who may influence Hockey’s decision.

The Nationals and some of the country Liberals who oppose the sale have been the most vocal to date, but some Liberals who also represent constituents in wheat districts are now speaking out in favour of the sale.

One of these, WA Liberal Senator
Dean Smith
, pointed out it’s just under a year since Parliament passed legislation to finally deregulate the wheat industry.

“I have been interested to note that some of the same arguments that were used by those opposed to the deregulation of wheat exports a year ago are being used again in this debate," Smith told Parliament on Thursday night.

“Indeed, those arguments are coming from many of the same organisations and individuals."

Smith disputes the claims of wheat monopolies by the deal’s opponents, or that control of Australia’s largest agricultural company would be handed to foreign investors.

But as the NSW Farmers grains spokesman Dan Cooper points out with some exasperation: “It’s not about foreign investment."

One suspects those farmers opposing the acquisition by ADM must groan every time they hear a friendly politician lament Australia “selling the farm" to foreigners.

For those with skin in the game, foreign-ness is not the problem here.

The extraordinary bidding war between
Bega Cheese
,
Murray Goulburn
and Canadian rival
Saputo
for
Warnambool Cheese and Butter
shows it’s market clout and competition that matter, not xenophobia.